Enthusiasm for SME listing, SEBI against price manipulation; Board will discuss it soon: WTM Bhatia

Mumbai, Dec 17 (Language) Capital markets regulator Sebi wants to curb over-indulgence, price manipulation and fraudulent trading practices on small and medium enterprises exchanges, a senior official said on Tuesday.

Addressing the India SME Banking Summit here, whole-time member Ashwini Bhatia said the regulatory board will take up the issue in its upcoming meeting.

According to media reports, issues related to the SME Board will be discussed in the SEBI Board meeting to be held on Wednesday.

“We are cognizant of the fact that we need to stop overzealousness, price manipulation or fraudulent trading practices,” Bhatia said while addressing a seminar on Tuesday.

He listed several concerns observed by SEBI in the matter of SME listing, and said it has come up with a consultation paper to address the same aspects.

“We will discuss this in the upcoming SEBI board meeting which will be held soon,” Bhatia said.

Bhatia, pointing to the revelations of some worrying practices in the market, said in the last two years, SEBI has increased its surveillance on the SME board.

These include companies misrepresenting facts, making it difficult for retail investors to assess the “true value and viability” of a business, and causing artificial shortages and overvaluation of shares, And there is also a tendency among promoters to reduce stake after initial public. gift.

“If you sell stake in your own company, how do you expect investors to invest in your company?” Bhatia asked, pointing to some promoter behaviour.

He said SMEs need to look at governance as a focus area, and added that if an entity has no problems on this front, there is no dearth of capital.

Bhatia said he is “sometimes surprised” by investor interest in SME IPOs, with some issuers being subscribed more than 1,000 times.

It is not easy for SMEs, he said, as meeting regulatory standards and post-listing administration creates a complex scenario for such entities.

Bhatia said SMEs mark disclosures and compliance as challenging aspects when it comes to listing, but he refuted such notions, saying he does not agree with this as banks require more disclosures and documentation while obtaining loans. Is required.

He said that SMEs have increased Rs 6,447 crore from 171 listings so far in 2024, and the overall market capitalization of all SME stocks is 2.25 lakh crore.